Pullback Due for RBOB Gas?

Gasoline has seen a crazy rally in the first six weeks of 2015, after a record number of daily declines; but, considering the continued oversupply in both crude and gasoline inventories, RBOB could look to pullback.

No longer in an oversold condition on the daily chart , gas has been unable to close above $1.6192, as well as a minor descending trend line .

So far, price action has been able to find support on the 23 percent Fib. from the recent bottom to rally top. If gas cannot exceed and breakout of the descending trend line , I look for gas to retest $1.46 before moving lower to $1.423.

According to EIA data, gasoline inventories are well above the 5-year average and have been since late fall. The next few months typically see less demand for gas due to seasonality , and I am uncertain whether or not demand will greatly pick up heading into summer.

In the near-term, I expect prices to remain low. Although, a breakout from resistance could send prices to $1.680.